2018
Invitation
Annual General Meeting of Shareholdersof LEM HOLDING SA
Thursday, 28 June 2018, at 15.30 hours (CEST)
University of Fribourg, Switzerland

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Invitation to the Annual General Meeting of Shareholders 2 018 | LEM

Invitation to the Annual
General Meeting ofShareholders 2018 ofLEM HOLDING SA
LEM's Board of Directors is pleased to invite you to the Annual General Meetingof Shareholders.
Date and timeThursday, 28 June 2018,at 15.30 hours (CEST),
doors open at 15.00 hours (CEST)
Place
University of Fribourg, Auditorium A 120, Boulevard de Pérolles 90, 1700 Fribourg/Freiburg, Switzerland
Public transportation
Take train to Fribourg/Freiburg SBB/CFF train station and change to TPF bus #1(direction Marly, Gérine) or #3 (direction Fribourg, Charmettes). Exit at the bus
stop Fribourg, Charmettes. The University is across the street.
Car parking
Car parking of the Ecole d'ingénieurs at Boulevard de Pérolles 80, 1700 Fribourg/Freiburg

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3Agenda and Proposals
1 	 Reporting for financial year 2017/18– –Management report and consolidated financial statements of the LEM Group– –Annual financial statements of LEM HOLDING SA– –Auditors' reports
1.1 	Approval of the management report, the consolidated financial statements of the LEM Group, the annual financial statements of LEM
HOLDING SA as at 31 March 2018, reports of the statutory auditors
Proposal: The Board of Directors proposes that the management report, theconsolidated financial statements of the LEM Group and the annual financial
statements of LEM HOLDING SA be approved.
1.2 	Consultative vote on the Compensation Report 2017/18
Proposal: The Board of Directors recommends that the Compensation Report asper pages 26 to 29 of the Annual Report be accepted (nonbinding consultativevote).
Explanation: The Compensation Report contains the principles governing thecompensation paid to the Board of Directors and the Executive Management andreports on the amounts paid to the members of both bodies for the financial year
2017/18.

2 	 Appropriation of available earnings and distribution
Proposal: The Board of Directors proposes that the total available earnings forthe financial year 2017/18 of LEM HOLDING SA be allocated as follows:(in CHF thousands)

Balance brought forward from previous financial year
Variation of treasury shares
Net profit of the financial year
Total available earnings

21'328(185)
31'89853'041

Proposal of the Board of Directors
Ordinary dividend
Balance to be carried forward(45'562)
7'479

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Explanation: The Board of Directors proposes the distribution of an ordinary
dividend of CHF 40 per share. Net of the Swiss withholding tax of 35%, this is anordinary net cash dividend of CHF 26 per share. The shares will be traded exdividend as of 3 July 2018. The net dividend will be paid on 5 July 2018.
Shares held by LEM HOLDING SA or any of its subsidiaries are not entitled todividends.

3 	 Discharge of the Board of Directors and the Executive
Management
Proposal: The Board of Directors proposes that the members of the Board ofDirectors and the Executive Management be granted discharge for the financialyear 2017/18.

4 	 Approval of the compensation of the Board of Directors
Proposal: The Board of Directors proposes that the shareholders approve amaximum aggregate amount of compensation of the members of the Board ofDirectors for the term of office from the Annual General Meeting 2018 until theAnnual General Meeting 2019 of CHF 1'100'000.
Explanation: The proposed maximum aggregate amount of CHF 1'100'000 iscomposed of the following (nonbinding) components:– –Gross fixed compensation of CHF 910'000 based on the gross Board of Directors membership fees (CHF 250'000 for the Chairman and CHF 80'000 foreach member) and the Committee membership fees (CHF 40'000 for the Committee's chairman and CHF 20'000 for each member) for the six members ofthe Board of Directors proposed for election or re-election under agenda item
6 below. For further details on the system of compensation of the Board ofDirectors, please refer to the Compensation Report 2017/18 on pages 26 to
29 of the Annual Report; plus
– –Related employer contributions to social security; plus– –Reserve amount which allows for flexibility in the event of extraordinary events
such as significant additional workload of all or certain members of the Boardof Directors that requires additional compensation, including membership in
ad hoc committees, or an increase in mandatory social security contributions
due to a change of applicable contribution rates.
Members of the Board of Directors do not receive any variable compensation.
The actual payout to the members of the Board of Directors for the term of officefrom the Annual General Meeting 2018 until the Annual General Meeting 2019 will
be disclosed in the Compensation Report 2018/19.

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5 	 Approval of the compensation of the ExecutiveManagement
The approval of the compensation of the members of the Executive Management
is divided into three separate votes:
1.	The first approval relates to the gross short-term variable compensation
to be paid to the members of the Executive Management under the Leadership for Results (L4R) plan – Short-Term Incentive for financial year
2017/18 (retrospective approval).
2.	T he second approval relates to the maximum gross long-term variable
compensation to be granted to the members of the Executive Management under the Leadership for Results (L4R) plan – Long-Term Incentivefor financial year 2018/19 (prospective approval) to be paid out in July
2021.
3.	T he third approval relates to the maximum fixed compensation of themembers of the Executive Management for the period from 1 October
2018 to 30 September 2019 (prospective approval).
5.1 	Vote on the aggregate amount of short-term variable compensation ofthe Executive Management for financial year 2017/18
Proposal: The Board of Directors proposes that the shareholders approve anaggregate amount of short-term variable compensation of the members of theExecutive Management for the preceding completed financial year 2017/18 ofCHF 1'144'664.
Explanation: The proposed amount of CHF 1'144'664 is composed of the following components:– –Gross short-term variable compensation of the members of the Executive
Management for the financial year 2017/18 of CHF 1'050'150; plus
– –Related employer contributions to social security of CHF 94'514.
For further details, please refer to the Compensation Report 2017/18 on pages
26 to 29 of the Annual Report.

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5.2 	Vote on the maximum aggregate amount of long-term variable compensation of the Executive Management for financial year 2018/19
Proposal: The Board of Directors proposes that the shareholders approve a maximum aggregate amount of long-term variable compensation to be granted tothe members of the Executive Management for financial year 2018/19 of up toCHF 1'200'000.
Explanation: The proposed maximum amount of CHF 1'200'000 is composed of
the following (nonbinding) components:– –Maximum gross long-term variable compensation under the Leadership forResults (L4R) plan of the members of the Executive Management. This maximum amount assumes that all performance targets will be reached at themaximum possible level under the L4R LTI (Long-Term Incentive) plan rules ofCHF 1'000'000; plus
– –Estimated related employer contributions to social security of CHF 200'000.
The L4R LTI plan is an annual long-term incentive plan which is based on theperformance of LEM evaluated over a period of three consecutive fiscal years.
The performance criterion is the cumulated economic value added (EVA) overthese three fiscal years. For further details, please refer to the Compensation
Report 2017/18 on pages 26 to 29 of the Annual Report.
The actual payout to the members of the Executive Management for grants
awarded during financial year 2018/19 will be disclosed in the Compensation
Report 2020/21.

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5.3 	Vote on the maximum aggregate amount of fixed compensationof the Executive Management for the period from 1 October 2018
to 30 September 2019
Proposal: The Board of Directors proposes that the shareholders approve amaximum aggregate amount of fixed compensation for the members of theExecutive Management for the period from 1 October 2018 to 30 September
2019 of up to CHF 1'800'000.
Explanation: The proposed maximum amount of CHF 1'800'000 is composed of
the following (nonbinding) components:– –Gross base salaries of the members of the Executive Management ofCHF 1'470'000; plus
– –Related employer contributions to social security and pension fund ofCHF 330'000.
The actual payout to the members of the Executive Management for the period
from 1 October 2018 to 30 September 2019 will be disclosed in the Compensation Reports 2018/19 and 2019/20, respectively.

6 	 Re-elections of members of the Board of Directors,
re-election of the Chairman of the Board of Directors andelection of one new member of the Board of Directors
6.1 	Re-elections
Proposal: The Board of Directors proposes the re-election of– –Ilan Cohen as member– –Ulrich Jakob Looser as member– –Ueli Wampfler as member– –Werner Carl Weber as member– –Andreas Hürlimann as member and Chairman (one single vote)to the Board of Directors for a term of office of one year extending until completion of the next Annual General Meeting.
Re-elections of the proposed nominees will be held individually.
Explanation: The mandates of all members of the Board of Directors will expire at theend of the Annual General Meeting of 28 June 2018.
For further details on the nominees as well as their qualifications, see biographies inthe Corporate Governance Report 2017/18 on pages 18 to 19 of the Annual Report.

8Invitation to the Annual General Meeting of Shareholders 2 018 | LEM6.2 	Election of one new member

Proposal: The Board of Directors proposes the election of François Gabella tothe Board of Directors for a term of office of one year extending until completionof the next Annual General Meeting.
Explanation: François Gabella was Chief Executive Officer of LEM Group fromJuly 2010 to March 2018. He was previously employed as Chief Executive Officer
by TESA Ltd, Senior Vice President by Areva T&D Ltd, and General ManagerPower Transformers by ABB Switzerland Ltd. He is a member of the Committeeof Swissmem (Zurich), chairman of the Board of Directors of Winterthur Instruments Ltd (Winterthur) and member of the Board of Directors of Optotune Ltd(Dietikon) and Switzerland Global Enterprise (Zurich).
François Gabella is a Swiss citizen, born in 1958. He received his graduate degreefrom École Polytechnique Fédérale de Lausanne (EPFL) and an MBA from theInternational Institute for Management Development (IMD).
As Chief Executive Officer of LEM Group, François Gabella has successfully led
the LEM Group and achieved a phase of profitable growth and shareholder value
creation. His standing for election is an opportunity to benefit from his know-howand industry insights.

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97 	 Re-election and election to the Nomination & Compensation
Committee
Proposal: The Board of Directors proposes the re-election of– –Ulrich Jakob Looser– –Andreas Hürlimannto the Nomination & Compensation Committee for a term of office of one year
extending until completion of the next Annual General Meeting. In case of reelection, Ulrich Jakob Looser will be appointed as chairman of the Nomination &Compensation Committee.
Re-elections of the proposed nominees will be held individually.

8 	 Re-election of the Independent Representative
Proposal: The Board of Directors proposes the re-election of the law firm Hartmann Dreyer, Attorneys-at-law, Boulevard de Pérolles 7, 1701 Fribourg/Freiburg,
Switzerland, as Independent Representative for a term of office of one year
extending until completion of the next Annual General Meeting.

9 	 Re-election of the statutory auditors
Proposal: The Board of Directors proposes the re-election of Ernst & Young Ltd.,
Lancy, as statutory auditors for the financial year 2018/19.

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OrganizationalInformation
Annual Report
The Annual Report 2017/18, consisting of the management report, the consolidated financial statements of the LEM Group, the annual financial statements ofLEM HOLDING SA, the Compensation Report and the reports of the statutory
auditors, was published on 23 May 2018 and can be accessed on LEM's website(https://www.lem.com/en/investors > Financial Reports). A hard copy of the complete Annual Report is sent to shareholders upon request to Computershare
Schweiz AG, LEM HOLDING SA, P.O. Box, 4601 Olten, Switzerland. The complete Annual Report is also available for inspection as from 7 June 2018 at theregistered office of LEM HOLDING SA, which is located at avenue Beauregard 1,1700 Fribourg/Freiburg, Switzerland. The Annual Report 2017/18 is only availablein English.
Voting Entitlement
Those shareholders entered in the share register on 15 June 2018, 17.00 hours(CEST) are entitled to vote.
From 15 June 2018, 17.00 hours (CEST) up to and including 28 June 2018, noentries will be made in the share register which would create a right to vote at
this year's Annual General Meeting. Shareholders who sell parts or all of theirshares before the Annual General Meeting are no longer entitled to vote to thatextent.
Personal Attendance at the Annual General Meeting
If you wish to attend the Annual General Meeting in person, please use theenclosed application form to order your admission card.

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Proxies to the Independent Representative
If you cannot attend the Annual General Meeting in person, according to Article
14 of the Articles of Association of LEM HOLDING SA, you may arrange to berepresented by:– –another person, who does not need to be a shareholder, or– –the Independent Representative, Hartmann Dreyer, Attorneys-at-Law, Boulevard de Pérolles 7, P.O. Box 736, 1701 Fribourg/Freiburg, Switzerland.
The enclosed application form may be used as power of attorney to the Independent Representative and for voting instructions. Both have to be returned
by enclosed envelope not later than 26 June 2018 to Computershare Schweiz
AG, LEM HOLDING SA, P.O. Box, 4601 Olten, Switzerland.
To the extent you do not provide specific instructions to the Independent Representative, you instruct the Independent Representative to vote your shares infavor of the proposals of the Board of Directors with respect to the items listedon the agenda. The same shall apply for additional or alternative proposals tothe agenda items included in this invitation and for new agenda items.
Electronic proxies and voting instructions
Alternatively, shareholders have the possibility to cast their votes by issuingelectronic proxies and voting instructions to the Independent Representative via
InvestorPortal shareholder platform: https://ip.computershare.ch/LEM. Further,
the admission card may be requested online. Shareholders may provide orchange any voting instructions they have communicated electronically until but
not later than 26 June 2018 at 23.59 hours CEST. The e-voting fact sheet andrequisite login data are part of the enclosed meeting materials supplied to theshareholders. Please follow the instructions.
Correspondence
We kindly request the shareholders to submit any correspondence in connection
with the Annual General Meeting by priority mail to Computershare Schweiz AG,
LEM HOLDING SA, P.O. Box, 4601 Olten, Switzerland.

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Language
The Annual General Meeting will be held in English. Presentations will be projectedin English. There will be no simultaneous interpreting into other languages.
Invitation
This invitation will be published in the Swiss Commercial Gazette on 7 June 2018.
At the end of the Annual General Meeting, we are pleased to welcome all shareholders to a cocktail buffet.

Fribourg/Freiburg, 7 June 2018
On behalf of the Board of Directors of LEM HOLDING SA

Andreas Hürlimann,
Chairman of the Board of Directors

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13Venue
Biel/BienneFribourg

Fribourg Centre

1 3 Fribourg Gare CFF
BouGrand-PlacessAv ero ll enuee Pé

durd dMidile v aBoutsxlle

auroenPérsdesArddevaeule

RoParc de Pérollies

RoR o u ted e la Fo n d e riute

Willhelme-KaiserFribourg Charmettes

1 3M u sé ed 'hn a tu re lle is to ire

Montreux

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Invitation to the Annual General Meeting of Shareholders 2 018 | LEM

Faculté des scienceséconomiques et sociales
Auditorium A 120EcoleP Parkingd'ìngénieurs

LEM | Invitation to the Annual General Meeting of Shareholders 2 018

15LEM HOLDING SA
Avenue Beauregard 1
1700 Freiburg/Fribourg
Switzerland
Phone: +41 26 460 10 30
Fax: +41 26 460 10 39
www.lem.com